CHICAGO (CBS) — A day ahead of key votes on Mayor Lori Lightfoot’s 2021 budget plan, several aldermen urged her office to reconsider alternatives to a $94 million property tax hike, with some aldermen predicting there’s not enough support on the City Council to approve the tax increase.
However, the mayor’s Budget Director, Susie Park, and Chief Financial Officer, Jennie Huang Bennett, repeatedly told aldermen on the City Council Finance Committee that they had explored every option for balancing the budget before pushing for what the mayor has deemed a “modest” property tax hike.
“We have looked at a lot of things before we get to this point,” Park said. “The property tax was not an easy decision to come to.”
The mayor’s budget team said before settling on the $94 million property tax hike, they also looked at possible increases to the city’s sales tax and cigarette tax, but noted those are already among the highest in the nation. They said they also considered increasing the city’s 7-cents-per-bag tax on disposable bags at groceries and other retailers. However, that tax only generates about $6 million a year in revenue, so it would have to increase exponentially to eliminate the property tax hike.
Ald. Edward Burke (14th), who has largely avoided weighing in during City Council debates after pleading not guilty to corruption charges last year, essentially urged the mayor’s budget team to make more rosy revenue predictions in the 2021 budget plan, and assume Congress would come through with a large enough relief package for local governments for Chicago to avoid a property tax increase.
Burke said there is “great unease” among the City Council about whether to approve the property tax hike, and told Bennett “you still have time to be a hero” and figure out how to avoid it.
However, Bennett said it is far from certain Congress will approve a coronavirus relief package that would provide federal funding to allow local governments to make up for lost revenue due to the pandemic, and the city should not base its spending plan on assumptions to the contrary.
“We can hope for the best, but we plan for the worst,” Bennett said.
Burke also suggested the city could eliminate the property tax hike by eliminating more than the 1,921 vacant positions already being cut from the budget, but the mayor’s budget team said the vacant positions that remain in Lightfoot’s spending plan are jobs that have been deemed essential by the various city departments in order to maintain essential services during the pandemic, and that officials plan to fill those positions in the coming weeks and months.
Aldermen also expressed reservations about Lightfoot’s push for annual property tax hikes going forward, tied to the Consumer Price Index (CPI).
Ald. Tom Tunney (44th) claimed the mayor should have been pushing for a property tax hike last year, when the mayor relied on several one-time revenue streams to close an $838 million shortfall.
“You knew this was coming, and yet we all clapped our hands last year, saying there was no property tax increase, for practical purposes, and yet you knew these ramp-ups were coming. So now you’re doing a CPI, where we should have been doing it before, and making the tough vote in our first year of the administration, rather than this fear-mongering about the tax bill will come when the voters are trying to decide who the next alderman is,” Tunney said.
However, Bennett said Tunney’s complaint was not fair, because no one could have predicted the pandemic and its massive impact on the economy.
“The fact that we lost $783 million in revenues … in 2021, and $886 million in 2020 isn’t something we could have planned for,” Bennett said. “You can’t plan for COVID. Nobody plans for COVID.”
Other aldermen criticized the Lightfoot administration for essentially dismissing proposed budget amendments offered by some of their colleagues on Monday, when mayoral allies shunted a number of those budget ideas to the council’s Rules Committee, where measures opposed by the mayor are typically left to languish without a vote.
Among the items now bottled up in the Rules Committee are a proposed $16-a-month per-employee head tax on large logistics operations like Amazon, Target, and Walmart; a plan to transfer $5.25 million from the Chicago Police Department budget to the Chicago Department of Public Health to set up a program to have mental health professionals, instead of police, respond to calls from people suffering a mental health crisis; a proposal to defund CPD’s infamous Homan Square facility on the West Side; and a plan to legalize and regulate video gambling terminals in Chicago.
“If we’re in a pandemic the way we are, why not exhaust those conversations before making decisions, because it appears to me that the body is not in favor of a levy for the numerous reasons they’ve mentioned, and we’ve got people put up ideas for revenue, but those get put in Rules Committee,” said Ald. Andre Vasquez (40th).
While the mayor’s budget team did not weigh in on all of those proposed amendments, they echoed Lightfoot’s concern that allowing video gambling terminals in Chicago before a Chicago casino is up and running could “cannibalize” the $200 million in revenue the city expects from a casino.
“What we’ve heard from the casino industry is they are very reluctant to go into a market where there is already some form of gaming,” Lightfoot said on Monday. “We are better served by moving through the casino process as quickly as we can to get a casino license, maybe stand up a temporary casino, and then move to a full-time casino. I’m very concerned about doing anything that has the potential to chill the market, as we have been informed by many of the people that are looking at Chicago as a possibility.”
The City Council Finance Committee is scheduled to vote on the proposed property tax hike and the rest of the mayor’s 2021 revenue plan on Wednesday. The Budget Committee is then scheduled to vote on the spending side of her budget plan on Thursday.
If approved, the budget plan would then be presented to the full City Council on Monday, though a final vote could come no earlier than the following City Council meeting, which has yet to be scheduled, but could come no sooner than next Wednesday, the day before Thanksgiving.
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